ILLINOIS WORKERS' COMPENSATION CLAIM HANDLING GUIDELINES
- 1 DEFINITIONS
- 2 EXCLUSIVE REMEDY
- 3 JURISDICTION AND LIMITATIONS OF ACTIONS
- 4 COMPENSABILITY
5 EXCLUSIONS AND DEFENSES
5.1 Course of Employment
- 5.1.1 Engaged in the Furtherance of Employer’s Business
- 5.1.2 Not in Furtherance of Employer’s Business
- 5.1.3 Traveling Employees
- 5.1.4 Commuting
- 5.1.5 Premises and Parking Lot Cases
- 5.2 Related to Employment
- 5.3 Intentionally Self-Inflicted Injury or Death
- 5.4 Employee’s Violation of the Law, Intoxication, and Illegal Use of Drugs
- 5.5 Employee’s Violation of Positive Orders of Employer
- 5.6 Personal Animosity
- 5.7 Hostile Attacks
- 5.8 Retirement
- 5.1 Course of Employment
- 6.1 Calculation of Average Weekly Wage
- 6.2 Total Disability
- 6.3 Partial Disability
- 6.4 Amputation or Loss of Use
- 6.5 Disfigurement/Scarring
- 6.6 Loss of Sight
- 6.7 Loss of Hearing
- 6.8 Penalties
- 6.9 Interest
- 6.10 Counsel Fees
- 6.11 Death Benefits
- 6.12 Medical Benefits
- 6.13 Refusal of Medical Treatment
- 7 SUBROGATION OR CREDIT
- 8 ATTORNEYS
- 9 CLAIMS PROFESSIONALS
10 LITIGATION AND APPEAL
- 10.1 Workers’ Compensation Judge Proceedings
- 10.2 Workers’ Compensation Appeal Board
- 10.3 Commonwealth Court and Supreme Court
- 11 SETTLEMENT
- 12 INSURANCE
Workers Compensation rights are statutory in nature. There is no common law to Workers’ Compensation benefits. The statutory authority for Illinois Workers’ Compensation is contained in the Illinois Workers Compensation Act 820 ILCS 305/1 et seq.
The Illinois Workers Compensation Act broadly defines an employer. It includes the State of Illinois and each county, city, town, township, incorporated village, school district, body politic or municipal corporation therein.
It includes every person, firm, public or private corporation, including hospitals, public service, eleemosynary, religious or charitable corporations or associations who has any person in service or under any contract for hire, express or implied, oral or written, and who is engaged in any of the enterprises or businesses enumerated in Section 3 of the Act.
Significantly, the Act provides that an employer can also be a sole proprietorship who prior to the accident has elected to become covered under the Act. – This means a non covered employer can opt in.
The Act automatically applies to all businesses which are declared to be extra hazardous including those businesses or enterprises involved in any of the following activities:
1. The erection, maintaining, removing, modeling, altering or demolishing of any structure.
2. Construction, excavating or electrical work.
3. Carriage by land, water or aerial service and loading or unloading in connection therewith, including the distribution of any commodity by horse drawn or motor vehicle where the employer employs more than two employees in the enterprise or business.
4. The operation of any warehouse or general or terminal store houses.
5. Mining, surface mining or quarrying.
6. Any enterprise in which explosive materials are manufactured, handled or used in dangerous quantities.
7. Any business or enterprise wherein molten metal, or explosive or injurious gasses, dust or vapors are manufactured, used, generated, stored or conveyed.
8. Any enterprise in which sharp edged tools, grinders or implements are used, including all enterprises which buy, sell or handle junk and salvage, demolish or reconstruct machinery.
9. Any enterprise in which regulations are imposed with respect to the placement or use of machinery or appliances for the safeguarding of employees.
10. Any enterprise in connection with the laying out or improvement of subdivisions of tracks of land.
11. Any enterprise for the treatment of cross ties, telegraph poles, timber or other wood with creosote or other preservatives.
12. Establishments open to the general public where alcoholic beverages are sold to the general public.
13. The operation of any public beauty shop wherein any chemicals or heated instruments are used.
14. Any business or enterprise serving food to the public for consumption on the premises or involving the use of handcutting instruments or slicing machines or involving the use of hot grease, hot water or hot foods.
15. Any business or enterprise in which the use of electric gasoline or other power driven equipment is used.
16. Any business or enterprise in which goods, wares or merchandise are produced, manufactured or fabricated.
The Act specifically allows that corporate officers of any domestic or foreign corporation may elect to withdraw themselves as individuals from the Act. Upon the election of a corporate office or to withdraw written notice of the withdrawal shall be provided to the insurance carrier and the election to withdraw is effective based on the receipt by the insurance carrier or other written notice. A corporate officer is defined as a bona fide president, vice president, secretary or treasurer. This section allows the employer to opt out certain high ranking employees.
The Act specifically does not apply to sole proprietorships or partners in a partnership or members of a limited liability company who elect not to provide and pay compensation for accidental injuries sustained by those owners of the business.
An employer can be held to be a statutory employer of a subcontractor’s employee in certain circumstances. Any employer who engages in the businesses of either the erection, maintaining, removing, remodeling, altering or demolishing of any structure or the construction or construction, excavating or electrical work can be held to be a statutory employer if it engages any subcontractors who failed to procure workers’ compensation insurance. An employer who engages in one of those businesses and who hires a subcontractor who is not insured is statutorily liable for claims made by any employees of the uninsured subcontractor.
In the event the statutory employer pays compensation under this subsection, he may recover the amounts paid from the actual employer – the subcontractor who is primarily liable for the compensation.
The definition of an employee is extremely broad. It includes every person in the service of the State of Illinois and any state, county or municipal body. The only excluded employees are employees of any police department or fire department whose population exceeds 500,000. (Essentially, this excludes only police officers and firefighters employed by the City of Chicago.)
The term employee does not include any persons performing services as a real estate broker, broker salesman, or salesman when such persons are paid by commission only.
Section 1(a)4 of the Act covers borrowing-loaning employers. The Act provides that if an employee is subject to a borrowing-loaning situation, then both employers are liable to pay compensation to the employee. Both the borrowing and lending employer are jointly and severally liable. However, as between the two employers, the borrowing employer is primarily responsible for the compensation absent any agreement to the contrary.
Based on any agreement between the loaning and borrowing employers, if the employer who is primarily responsible does not pay benefits, then the paying employer is entitled to full reimbursement for all benefits paid including reasonable attorney’s fees and expenses to pursue recovery.
Importantly, both borrowing and lending employers are entitled to the exclusive remedy provisions of the Act (described below) whether or not they have made payments to the employee. The joint and several legal obligations under the Act create the exclusive remedy protection irrespective of actual payment.
The Workers' Compensation Act does not apply to independent contractors as they are not employees. However, the courts strictly construe independent contractor agreements. Simply designating an individual as an independent contractor cannot avoid liability for compensation benefits as an employee. This rule of law is not contained in the Illinois Workers Compensation Act, but instead is based on court decisions. An individual designated as an independent contractor will be found to be an employee if the employer exercises significant direction and control over the individual’s actions. Most cases involving disputes as to independent contractors involve truck drivers and construction workers. Court decisions strongly favor finding those individuals to be employees, especially if the employer is in the truck driving or construction business. Multiple factors go into the determination of whether or not an individual is an independent contractor.
The critical question is the extent to which the employer has direction and control over the employee and exercises this direction and control.
Other factors to consider include:
1. Whether the worker supplies his own equipment, materials and tools.
2. Whether taxes are taken out of the individual’s paychecks.
3. Whether the worker can control his own hours and days work.
4. Whether the worker can accept or reject assignments at will.
5. Whether the worker can take assignments from other companies
6. Whether the worker has a unique skill that he brings to the business
7. Whether the nature of the work performed is part of the employer’s regular business.
Illinois is an exclusive remedy state. The exclusive remedy provisions are contained in Section 5(a) and Section 11 of the Illinois Workers Compensation Act. It is a broadly written section of the statute and is intended to give broad protections to the employer.
Section 5(a) states that no common law or statutory right to recover damages from the employer, his insurer, his broker, any service organization retained by the employer, his insurer or his broker to provide safety service, advice or recommendations for the employer or the agents or employees of any of the them for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided, is available to any employee who is covered by the provisions of this Act, to anyone wholly or partially dependent on him, the legal representatives of his estate, or anyone otherwise entitled to recover damages for such injury.
The exclusive remedy has been interpreted to strongly favor employers. The Act protects not only employers, but all those associated with the employer including its insurer, broker and attorneys.
Additionally, Section 11 of the Act further supports the exclusive remedy by providing “the compensation herein provided, together with the provisions of this Act shall be the measure of the responsibility of any employer” covered under the Act.
Illinois does not recognize any exception under the Exclusive Remedy Doctrine. In order for an employee to avoid dismissal of a civil suit based on exclusive remedy, the employee must allege that the injury sustained was not the result of an accidental injury, but rather an intentional tort.
However, a civil suit is allowed against employers who failed to procure insurance under the Act. Pursuant to Section 4 (d) of the Illinois Workers Compensation Act, employers who knowingly refuse to comply with the obligation to purchase insurance can file a civil action against the employer then receive a jury award. In such an action, the employer waives the defenses of assumption of risk or negligence or that the injury was due to a co-employee. In such an action, proof of the injury constitutes prima facie evidence of negligence on the part of the employer. The burden of proof is on the employer to show freedom from negligence resulting in the injury.
The jurisdiction of the Illinois Workers Compensation Act is broad. Three different bases for jurisdiction are allowed under the Act.
1. Jurisdiction applies to any individual whose contract of hire was made in the State of Illinois whether or not the injury occurs in the State of Illinois or elsewhere.
2. The Act applies to any and all accidents which occur in the State of Illinois.
3. Finally, the Act applies to any injuries where the employment of the individual is principally localized within the State of Illinois regardless of the place of accident. This section of the Act has been interpreted to apply to all employments which are based in the State of Illinois. For example, if an employer has a terminal in the State of Illinois, but the employee’s work is primarily out of state, Illinois will take jurisdiction of that claim. However, if the terminal is located out of state, even if the employee spends most of his working day in the State of Illinois, Illinois will not take jurisdiction of any claim of injury unless that injury actually occurs in the State of Illinois.
Illinois will take jurisdiction of any claims for injuries outside the State of Illinois if either the contract of hire is made in the State of Illinois or the employment is principally localized in the State of Illinois.
The Illinois Workers' Compensation Act does not contain any language relating to discovery of an injury. Pursuant to case law, the date that an employee knows or should have known that he had an injury and knows or should have known that it is related to his work duties is considered the date of manifestation. The time limits set forth in the Act commence based on the date of manifestation. Claims must be filed within the statute of limitations and notice of the injury must be given based on the date of manifestation.
Pursuant to Section 6 of the Illinois Workers' Compensation Act, notice of the injury must be given by the employer to the employee as soon as practicable, but no later than 45 days after the date of the accident.
If a claimant fails to give notice of the accident within 45 days, the claim is barred.
However, the Act also provides that “no defect or inaccuracy of such notice shall be a bar to the maintenance of proceedings on arbitration or otherwise by the employee unless the employer proves that he is unduly prejudiced in such proceedings by such defect or inaccuracy.” Therefore, if defective notice is given, the employer must prove prejudice to defeat the claim based on a notice defense.
The statute of limitations for filing claims in Illinois is three years from the date of the accident or two years from the last date of payment of compensation wherein he has been paid, whichever shall be later.
Therefore, the Act requires that an application must be filed within three years from the date of the accident. However, if any compensation or medical payments are made after the accident, the statute of limitations does not run until two years after the last date of payment of said compensation. This provision has been interpreted to include both the payment of indemnity benefits or medical benefits. Therefore, the statute of limitations will not run until the two years after the date of last payment of any medical bills.
In the event that the accident resulted in a claimant’s death, the application for benefits must be filed within three years after the date of death where no compensation benefits were paid or within two years after the date of last payment of compensation, whichever is later.
This means that if the accident caused the death of a claimant within a year, the application has to be filed within three years of the date of the death. If following the accident the claimant lived for several years after the accident and then died, then the claim has to be filed within two years of the date of death.
Occupational disease death claims are required to be filed within one year after the death of such employee and within five years after the last day of the last exposure to the hazards of the disease. The limitations period is extended to 25 years in the event of exposure to radiological material or asbestos.
Occupational disease claims are required to be filed within three years after the date of the last exposure to the hazards of the disease. An application for compensation must be filed with the Commission within three years after the date of the disablement where no compensation has been paid or within two years after the last date of payment of compensation where any has been paid, whichever shall be later. If the occupational disease results in death, the application for compensation must be filed within three years after the date of death where no compensation has been paid or within three years after the last payment of compensation, if any has been paid, whichever is later.
The limitations period is extended for certain types of cases. Cases of coal miner’s pneumoconiosis have longer limitation periods. Those claims must be filed within five years after the last exposure if no compensation is paid or within five years after the last payment of compensation, whichever is later. The limitations period is extended for occupational disease claims for exposure to radiological materials or asbestos. Those claims must be filed within 25 years of the date of last exposure.
The limitations period is extended if the employer attempts to settle with the claimant without obtaining Commission approval. See Section 23.
The limitations period can be extended by the payment of group medical or disability benefits. The limitations period does not begin to run until such benefits have been terminated. See Section 8(j)1.
The Illinois Workers Compensation Act does not define the term accident. Section 1 (d) of the Act states, “To obtain compensation under this Act, an employee bears the burden of showing, by a preponderance of the evidence, that he or she has sustained accidental injuries arising out of and in the course of the employment.”
In order for a case to be compensable, an employee must prove that an accident arose out of and in the course of the employment. Importantly, Illinois is not a positional risk state. Illinois adopts the minority rule. Therefore, in order to prove an accident compensable, an employee must show that the accident arose out of the employment and not simply occurred in the course of employment. The employee must show that the accident occurred as a result of a risk peculiar to the employment and not a risk common to the general public.
If an accident occurs at work as a result of a risk common to the general public, compensation will be denied. Consequently, unexplained slips, trips and falls where no defect in the premises is identified are not compensable. Accidents which occur as a result of a fall up or down stairs where no employment risk is identified are not compensable.
An injury is not defined in the Illinois Workers Compensation Act. The Act does not describe what constitutes an accident or an injury. The Act does not describe the standard of proof required by the employee in proving that he sustained an accident or injury. The Act simply states that petitioner has a burden of proving an accident by a preponderance of the evidence.
According to case law, the standard of proof is that the employee must prove that his work incident or work duties were “a” causative factor in his condition of ill-being. There is no requirement that the work incident or work duties be the major contributing cause, proximate cause, predominant cause or more than 51% of the cause for example. Instead, case law states only that an employee must simply prove by a preponderance of the evidence that his work incident or work duties were “a” causative factor in his injury.
Illinois recognizes repetitive trauma injuries without specific accidents. A repetitive trauma is based on the date of manifestation. This is the date on which the employee knew or should have known that he was injury and knew or should have known that his condition was work related. Frequently, the date of manifestation is the first date of treatment or the date on which a diagnostic test confirmed the existence of an injury. The standard of proof is low and the employee must simply prove that the work duties were a causative factor in the condition of ill-being.
The Act does not delineate which infectious diseases, if any, are compensable. Based on case law, infectious diseases can be held compensable. The claimant must prove harmful exposure and causation by a preponderance of the evidence.
The Act does not delineate which heart related cases will be held compensable. In order for a heart injury (not involving a firefighter) to be compensable, the claimant must prove that he sustained a work injury and prove that the work injury was a causative factor in his heart injury. This is a low standard of proof. The fact that an employee has a preexisting condition will not result in a denial if the employee can prove that the work injury was “a” causative factor in initiating, accelerating or aggravating an underlying heart condition. The claimant does not need to prove that the work incident was a major cause or major contributing cause or more than 51% of the cause.
Illinois law does not favor psychological claims. Physical-Mental injuries are routinely held compensable. Therefore, if a claimant sustains a physical injury which leads to a mental injury, those cases are routinely held compensable.
Illinois law disfavors Mental-Mental injuries. If a claimant witnesses a significant traumatic event and suffers a mental injury, those claims are routinely held compensable. An example of such a claim would be if an employee witnessed a co-employee being killed or seriously injured such as an amputation.
However, if an employee claims mental injury as a result of mental trauma at work, those claims are disfavored. Claims based on excessive workload, excessive criticism by a supervisor or co-employees, even claims involving minor physical trauma such as being slapped, all of which result in mental injury are disfavored. Claims involving mental trauma resulting in mental injury are routinely denied absent significant mental trauma.
In addition to the Illinois Workers' Compensation Act, the Illinois legislature also enacted the Illinois Workers’ Occupational Diseases Act – 820 ILCS 310/1 et seq. The provisions are very similar to the WC Act.
The statute does not define the level of exposure needed for occupational diseases except for hearing loss. In order for a claim to be made for occupational disease, the claim must prove exposure to the occupational disease and he must prove causal connection. The standard for causal connection is low. It is based on case law. In order for a claimant to prove causal connection, he must prove that the work exposure was “a” causative factor in his condition of ill-being. No higher standard of proof is required. The claimant does not need to prove proximate cause, major contributing cause or more than 51% of the cause. Old Ben Coal Co. v. Industrial Commission, 217 Ill.App.3d 70, 576 N.E.2d 890 (1991).
Illinois law does not allow for apportionment for occupational disease among several employers. The only employer held liable is the one where the employee sustained the last harmful exposure.
An accident which occurs while an employee is engaged in the furtherance of the employer’s business will generally be held compensable. This is true even if the employee is acting negligently or grossly negligently.
An accident which occurs on the employer’s premises and during work hours will not be held compensable if the employee’s conduct is so egregious as to take him outside the scope of his employment. This means more than violation of a safety rule or engaging in conduct inconsistent with the employer’s business. In order for such a case to be held not compensable, the employee must be engaging in an act for his personal benefit as opposed to the employer’s benefit.
As an example, a recent Illinois case involved a claimant who was riding double on a forklift truck. The purpose of riding double on the forklift truck was so the employee could go on break quicker. The employer disputed and denied the case on the basis that the claimant violated a safety rule and that he engaged in action for his sole personal benefit. The case was denied not because of the violation of a safety rule, but because petitioner engaged in an activity not in the furtherance of his employer’s business and solely for his own personal benefit.
Accidents involving traveling employees are held compensable so long as at the time of the accident the claimant was engaged in reasonable and foreseeable activity. Once a claimant is found to be a traveling employee, the scope of his activities which may be found compensable broadens considerable compared to standard employees. Any and all accidents which occur involving traveling employees are generally held compensable unless the employee is found to have engaged in purely personal activity which the employer could not reasonably foresee.
As a general rule, accidents which occur while commuting back and forth to a fixed workplace are not compensable. An employee is not considered in the course of employment while traveling to and from work. An employee does not become in the course of his employment until he arrives on the employer’s premises. In order to be compensable, an employee is allowed to be on the employer’s premises within a reasonable period of time before or after work.
If an employee has no fixed place of work and is required to travel to various work sites, he is considered a traveling employee and he is considered to be in the course of his employment once he leaves his home.
If an employee is required to travel as part of his work duties and he is compensation for his travel time, then he becomes a traveling employee and accidents which occur during the course of transportation are found compensable. This exception may apply if an employee is paid travel expense whether or not he is paid wages for travel time.
Any employee who is assigned a special mission or assignment is considered a traveling employee. The traveling employee designation expands the scope of compensability and any accidents which occur during travel are compensable so long as the activities are reasonable and foreseeable.
Cases involving special missions or assignments can be denied in the event there is a significant deviation which occurs during the special mission.
If an employee arrives on his employer’s premises within a reasonable period of time before or after work, he is in the course of his employment. However, slips and falls in parking lots are not necessarily compensable unless the employee also proves that the accident arose out of the employment.
Cases involving slips, trips and falls in parking lots are routinely denied if there is no defect in the parking lot and if a parking lot is open to the general public. A claimant must prove that he was at an increased risk in order to have a slip and fall in a parking lot ruled compensable. He can prove increased risk if he can prove there was a defect in the lot or if the lot was not open to the general public or if he was ordered to park in a particular section of the lot.
Cases involving parking lot accidents that are caused by defects in an employee’s car are not compensable as such an accident is personal to the employee.
Cases involving motor vehicle accidents between co-employees and a company parking lot are routinely held compensable.
Accidents which occur on the job site, but are completely unrelated to the employment are not compensable. Idiopathic falls are not compensable unless the injury risk was increased by the employer’s premises. Unexplained falls on an employer’s premises are not compensable unless the risk of injury was increased by the job duties or the employer’s premises.
Cases involving intentionally self-inflicting injury or death are not compensable. Any intentional act committed by the employee which results in injury is not compensable.
Fights between employees are compensable if the fight resulted as a result of a work dispute and the claimant was not the aggressor in the fight. If the fight was not the result of a work dispute or if the claimant was the aggressor, compensation is denied.
The Illinois Workers' Compensation Statute never contained any type of statutory language which denied compensation based on violation of the law, intoxication and illegal use of drugs until recently. Case law before 2011 provided that if a claimant violated the law to such a degree that it took him outside the scope of his employment, then his accident would not be compensable. Similarly, according to case law, if an individual was so intoxicated whether as the result of alcohol or drugs that he could no longer perform his job duties, then any accident that he incurred was not compensable. This has been a high burden for the employer to sustain. See Paganelis v. Industrial Commission, 132 Ill.2d 468, 548 N.E.2d 1033(1989); District 141,International Association of Machinists & Aerospace Workers v. Industrial Commission, 79 Ill.2d 544, 404 N.E.2d 787(1980).
This is especially true in drug use cases where compensation has been awarded despite strong evidence of drug use. In Lakeside Architectural Metals v. Industrial Commission, 267 Ill.App.3d 1058 (1994), the employer proved that the claimant smoked a marijuana cigarette during his lunch break and then climbed onto a scaffold on the 48th floor of a building and fell to his death. Compensation benefits were still awarded.
In 2011, for the first time, the Workers' Compensation Act was amended to add a provision dealing with intoxication and drug use. Section 11 of the Workers' Compensation Act was amended. To a great degree, the statutory language simply codified prior case law. However, the statute went somewhat further in creating a rebuttable presumption of denial in favor of the employer who can prove significant alcohol or drug use by the employee at the time of the accident.
The Act now states that no compensation shall be payable if the employee’s intoxication is the proximate cause of the employee’s accidental injury.
Further, the Act states that no compensation shall be payable if at the time of the employee incurred the injury the employee was so intoxicated that the intoxication constituted a departure from the employment.
If the employer can prove that at the time of the accident petitioner had a blood alcohol level .08% or higher, or if he had marijuana or another controlled, intoxicating substance in his system, then there is created a rebuttable presumption that the employee was intoxicated and that the intoxication was the proximate cause of the injury. Therefore, the claim is not compensable.
However, the Act provides that the employee can overcome the rebuttable presumption by the preponderance of admissible evidence that the intoxication was not the sole proximate cause or proximate cause of the accidental injuries.
This section of the statute is a benefit for employers but it is not strongly written to be an absolute bar to compensation if drug or alcohol intoxication is shown. Cases involving drug and alcohol use can be denied based on the statute but must still be thoroughly investigated to develop evidence to prove the claimant was acting aberrantly at the time of the accident.
If an employee violates positive orders of the employer, his claim could be held non-compensable, but only if his violation is so severe as to take him outside the course of his employment. An act of negligence or even gross negligence would be insufficient to take a claimant outside the scope of his employment. A violation of a safety rule is insufficient to take a claimant outside the scope of his employment. The issue is whether at the time of the employment the employee was still acting in furtherance of his employer’s business. If he was not, then such a claim would not be compensable. If a claimant was attempting to further the employer’s business, although contrary to orders, his claim would still be found compensable.
As a general rule, if the claimant is injured as a result of a personal dispute at work, such a claim would not be compensable. An employer is not an insurer injuries caused by disputes during work hours. Personal disputes between employees which result injury are not compensable. No compensation is allowed if the claimant is found to be the aggressor in the work dispute. There can be only one aggressor in a work dispute.
If a claimant is a victim of hostile attack at work from a co-employee, that claim may be found compensable if from the employee’s standpoint the incident is accidental.
If the incident did not involve a co-employee, the claimant must prove that the hostile attack was related to the employment or a risk of employment. Otherwise, such a claim would not be compensable as Illinois is not a positional risk state. If a claimant can show that the area where he was working is a higher crime area and he was the victim of a hostile attack, then such a claim would be found compensable. If the attack on the employer’s premises was personal to the employee, the claim is not compensable.
As a general rule, an employee’s voluntary retirement does not affect his right to receive benefits if he is found to be permanently and totally disabled or entitled to wage differential benefits. However, for accident dates after 9/1/11, wage differential benefits end at age 67 (see below at 6.3.3)
However, if an employee is temporarily disabled and opts to retire rather than seek employment, then his right to temporary total disability benefits and/or maintenance benefits is terminated.
The filing of a claim for pension or union retirement benefits is sufficient evidence to prove retirement. Any written statement by the claimant is sufficient. It is preferred to get written confirmation of any retirement to avoid disputes over verbal communications.
Section 10 of the Act describes the average weekly wage calculation. Wages generally are based on 52 weeks of earnings. The statute states “The compensation shall be computed on the basis of the ‘average weekly wage’ which the actual earnings of the employee and the employment in which he was working at the time of the injury during the period of 52 weeks ending with the last date of the employee’s last full pay period immediately preceding the date of injury, illness or disablement excluding overtime and bonus divided by 52.
However, if the employee did not work a full 52 weeks prior to the accident or if the employee lost five or more days during the year prior to the accident, then the average weekly wage is calculated by taking the totals earnings and dividing by the weeks and parts that the employee actually earned.
If the employee’s employment was too short to calculate wages in this manner, then a similar employee’s wages are to be used.
If at the time of the accident a claimant has more than one job, then the earnings from all such employers are added together and considered as earned from the employer liable to pay compensation.
Wages have been held to include all earnings including incentive based bonuses, but not once a year type bonuses.
Overtime hours are included in the average weekly wage calculation ONLY if a claimant’s overtime hours are mandatory and consistent. Overtime pay is never included in the average weekly wage calculation.
Overtime hours are never included for seasonal employees such as construction workers. Part time employee wages are treated differently. For part time employees, total earnings are divided by the total weeks worked – not just the weeks and parts thereof worked.
Under the Occupational Diseases Act , overtime is included in the average weekly wage calculation.
Temporary total disability is paid at a rate of 66-2/3% of the average weekly wage subject to minimums and maximums. The minimums vary based on whether an individual is single, married or has dependents. The TTD rate cannot exceed the average weekly wage irrespective of the minimum.
The maximum rate is based on 133-1/3% of the State’s average weekly wage. The maximum rate increases every six months if there is an increase in the State’s average weekly wage. A rate table is attached to the end of this summary.
Illinois has a three day waiting period. The three day waiting period relates to scheduled workdays, not calendar days. Therefore, the first day of TTD is not owed until an employee misses three scheduled workdays. If an employee is off for 14 or more calendar days, then the employer must pay TTD starting from the first day off work.
Temporary total disability benefits are owed so long as a claimant is authorized totally off work.
If a claimant is given work restrictions or reduced hours and the employer offers limited work, then TTD is not due. However, if the claimant returns to work with some loss of earnings, then he is entitled to temporary partial disability during that period. Temporary partial disability is calculated by taking the amount petitioner would have earned in the full performance of his duties minus the amount he is able to earn while on modified work times two-thirds. That represents the temporary partial disability rate.
The Act provides for several different types of permanent partial disability. The Act also provides for permanent wage loss benefits. A claimant can seek permanent wage loss benefits under Section 8(d)(1) or permanent partial disability benefits under Section 8(c), 8(d)2 and 8(e), but he cannot claim both. If a claim is made for wage differential, the claimant can receive wage differential benefits, but not PPD. Alternatively, if a claimant opts for PPD, he can get an award of PPD, but not wage differential.
There are three different sections of the Act which allowed for permanent partial disability. Section 8(c) grants up to 162 weeks of permanent partial disability benefits for disfigurement. Section 8(d) 2 allows for up to 500 weeks of permanent partial disability benefits for loss of use of the man as a whole. Section 8(e) allows for permanent partial disability for various members. The weeks available for each member vary and are included in the chart at the end of this summary.
The permanent partial disability rate is calculated by taking the average weekly wage times 60%. The PPD rate is subject to the same minimums as the TTD rate. The PPD maximum is a historic figure that changes annually based on changes in the State’s average weekly wage. The PPD maximum is significantly lower than the TTD maximum. A summary of the PPD maximums over the last ten years is included in the rate chart at the end of this summary.
Until 2011, the Illinois Workers' Compensation Act did not provide for an employer to obtain an impairment rating. Moreover, the Commission could not consider impairment ratings in the calculation of permanent partial disability.
Effective September 1, 2011, for accidents after that date, the Act allowed for employers to obtain an impairment rating pursuant to the AMA Guidelines to the Evaluation of Permanent Impairment, current edition. Illinois now uses the current edition of the AMA Guides which is the Sixth Edition. (P.A. 97-18, eff. 6-28-11) See Section 8.1(b): AMA Guides.
The Act provides that in determining the level of permanent partial disability the Commission shall base its determination on the following factors:
(i) the reported level of impairment pursuant to the AMA Guidelines;
(ii) the occupation of the injured employee;
(iii) the age of the employee at the time of the injury;
(iv) the employee’s future earning capacity; and
(v) evidence of disability corroborated by the treating medical records.
The Act states no single enumerated factor shall be the sole determinant of disability. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in a written order.
Impairment ratings are obviously new to Illinois. The Commission is considering impairment ratings for the first time. The impairment rating have so far resulted in the Commission awarding a lower percentage for permanent partial disability than it has in the past, but decisions so far have not resulted in awards anywhere near impairment ratings as set forth in the AMA Guides. The Commission tends to award permanent partial disability at a level significantly higher than impairment ratings.
The Act provides that employees are entitled to vocational rehabilitation if needed. Section 8(a) of the Act states “The employer shall also pay for treatment, instruction and training necessary for the physical, mental and vocational rehabilitation of the employee, including all maintenance costs and expenses incidental thereto.”
The seminal case in Illinois is National Tea v. Industrial Commission, 97 Ill.2d 424 (1983) which sets forth the factors to be considered in whether or not vocational rehabilitation will be awarded.
The most critical determination in determining whether or not vocational rehabilitation will be awarded is the age of the claimant, the significance of the injury, the extent of the employee’s limitations, petitioner’s past work history, petitioner's educational background and petitioner's past wages.
As a general rule, the employer chooses the vocational rehabilitation specialist. Petitioner is obligated to cooperate with the vocational rehabilitation specialist or else face suspension of benefits.
If a claimant reaches MMI, the right to TTD ends. If he cannot return to work at his prior employment because of work restrictions, he may be entitled to continued benefits which the Act describes as “maintenance.” Maintenance benefits are awarded to claimants so long as they are cooperating with the vocational rehabilitation plan. There is no limit on the extent of maintenance benefits which can be awarded. Maintenance benefits are awarded at the TTD rate.
If a claimant returns to work, but has suffered wage loss, he can make a claim for permanent wage loss under Section 8(d)1 of the Act. For accidents prior to September 1, 2011, the right to wage differential benefits is unlimited. Wage loss benefits are awarded to the claimant for the duration of his disability which essentially is for life.
However, for accidents September 1, 2011 and after, wage loss benefits are time limited. If a claimant is entitled to wage loss benefits, the wage loss benefits continue through age 67 and then stop. At a minimum, if the claimant is older, the claimant is entitled to wage loss benefits for at least five years from the date of the final award.
Wage loss benefits are calculated based on what the claimant would be currently earning at the time of trial if he were still employed in his prior occupation compared to what a claimant is earning or is able to earn currently following his work injury times 66 2/3%.
Wage loss benefits are not offset by an employee’s receipt of regular retirement benefits, Social Security Disability benefits or Social Security benefits. If a claimant has permanent wage loss and voluntarily retires, he can still be entitled to continuing wage loss benefits.
The maximum wage differential rate is the State’s average weekly wage. This essentially means that the wage differential rate is unlimited since few individuals ever reach that level.
As previously stated, a claim can be made for wage loss benefits or permanent partial disability, but not both. If a claimant returns to work and suffers wage loss, but opts to receive permanent partial disability rather than wage loss, he frequently is given an award for a significant loss of use of the man as a whole generally in the range of 30% to 50% loss of use of the man as a whole depending on the seriousness of the injury and the extent of the wage loss.
Disputes occur frequently as to what an individual can earn following his injury. Claimants frequently take jobs at a rate of pay lower than what they could earn in an effort to establish a wage differential award. Wage differential awards are difficult to change once they are entered. Employers have very limited rights to move to modify wage differential awards within 60 months of the entry of an award. In order to change a wage differential award, an employer must prove that an employee is or could be earning more that at the time of trial AND the employer must also prove a material improvement in the employee’s physical condition.
Wage loss benefits are calculated based on what an employee is earning or what he is able to earn. Therefore, if the employer contends that the employee could earn more than what he is earning; convincing evidence must be offered to reduce the wage differential award. The employer is entitled to offer a vocational assessment and labor market survey to show that an employee could earn more than what he is currently earning. If this evidence is convincing, then the Commission will award benefits based on what the claimant could earn rather than what he is actually earning.
If an employer offers a legitimate job, the claimant must accept that job or face a loss of benefits. If the employee is claiming temporary total disability and the employer offers a job, the right to TTD ends. A claimant must accept an employer job offer or lose the right to TTD.
Similarly, if the employer offers a job within the claimant’s restrictions that would result in a return to work without wage loss, the claimant is not entitled to wage loss benefits if he chooses to find employment elsewhere at a lower rate of pay. An employee simply does not have the right to refuse a legitimate job offer from the employer and continue to claim benefits. However, an employer who offers a job at an inflated rate of pay not consistent with the job duties may still be held liable to pay a wage differential award.
The Illinois Workers' Compensation Act does not specify as to whether the claimant or employer can retain a vocational expert. Both parties are entitled to retain a vocational expert.
The Act provides that vocational rehabilitation counselors must be certified. See Section 8(a) - The Act states “Any vocational rehabilitation counselors who provide service under this Act shall have appropriate certifications which designate the counselor as qualified to render opinions relating to vocational rehabilitation.” The Act further provides that either “the employee or employer may petition the Commission to decide disputes relating to vocational rehabilitation” and the Commission is empowered to resolve all such disputes.
For all amputations, the amputation rate is calculated at 60% of the average weekly wage. However, the maximum amputation rate is not capped by the permanent partial disability rate, but instead it is capped by the TTD maximum rate.
The loss of the first or distal phalanx of the thumb or any finger or toe merits an automatic award of 50% of the digit. The loss of part or all of the middle phalanx or beyond entitles the claimant to 100% loss of use of the thumb, finger or toe.
Employers must pay undisputed amputations on a weekly basis once the benefit is confirmed to be due. Case law is not clear as to whether the employer’s obligation to make this payment begins with the date of the accident, but certainly it begins no later than the date upon which temporary total disability benefits stop.
For an amputation of the arm below the elbow, an employee is entitled to 100% loss of use of the arm. If the amputation of the arm is above the elbow, an additional 15 weeks is awarded. If the amputation is at the shoulder, an additional 65 weeks is awarded.
Similarly, for an amputation of the leg below the knee, a claimant is entitled to 100% loss of use of the leg. If the amputation of the leg is above the knee, an additional 25 weeks is awarded. If the amputation is at the hip, an additional 75 weeks is awarded.
If the injury results in the enucleation of an eye, a claimant is entitled to 100% loss of use of the eye plus an additional 10 weeks.
Benefits for disfigurement are set forth in Section 8(c) of the Act. Disfigurement is allowed for any serious and permanent disfigurement which is above the axillary line or below the knee. Permanent disfigurement cannot be evaluated until at least six months after the accident. Disfigurement cannot be awarded if permanent partial disability is awarded. A claimant can get disfigurement or disability, but not both.
The disfigurement rate is the same as the permanent partial disability rate calculated at 60% of the average weekly wage subject to the same minimums and maximums.
Awards for disfigurement are difficult to predict and are based on personal observation and assessment by hearing officers.
Compensation for loss of use of the eye is set forth in Section 8(e)13. The maximum number of weeks for loss of sight is 162 weeks.
The statute does not set forth the basis upon which the Commission awards benefits for loss of sight. The Commission should rely on the AMA Guides more now than before. Prior to the AMA Guides, the Commission tended to award permanent partial disability for loss of vision based on the Wisconsin Eye Chart. The Commission tended to award permanent partial disability based on the percentage loss as set forth in the Wisconsin Eye Chart, but tended to increase the percentage of permanent disability awarded if the claimant had symptoms beyond that of loss of vision.
The Commission tends to award permanent disability for loss of sight based on a claimant’s corrected visual acuity before and after the accident if the claimant wore glasses before the accident. If a claimant had 20/20 vision prior to the accident and did not wear glasses, then permanent disability is awarded based on the uncorrected current visual acuity. If prior to the accident the claimant required glasses, and after the he still required glasses and his visual acuity was not significantly changed, the award tends to be based on the corrected visual acuity rather than the uncorrected visual acuity.
Loss of hearing claims are more difficult to prove in Illinois than most other claims. The statute is very specific as to what must be proven in order to receive compensation for loss of hearing. Importantly, loss of use of an ear under the Workers Compensation Act is capped at 54 weeks. Under the Occupational Diseases Act , it is double, or 108 weeks. Total loss of hearing in both ears is capped at 215 weeks.
In order to prove a claim for loss of hearing due to industrial noise, the employee must prove the following exposure:
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If a claimant cannot prove noise exposures at those levels, the claim for compensation is denied. A claim for compensation will be denied even if an employee can prove exposure at those levels if the employer presents evidence of hearing protection which reduces the exposure to below the levels listed.
Additionally, the Act is very specific as to what level of hearing loss is compensable. In determining loss of hearing for compensation purposes, the only compensable hearing levels are at frequencies of 1,000, 2,000 and 3,000 cycles per second. Loss of hearing ability for frequency tones above 3,000 cycles per second are not considered as constituting disability for loss of hearing.
In calculating hearing loss at those levels, the loss of hearing must exceed an average of 30 decibels. If the loss if 30 decibels or less, no compensation is awarded. In making the calculation, you add together the total loss at the 1,000, 2,000 and 3,000 Hz, you divide by three to get the average loss and then deduct 30.
Whatever the total net loss is then multiplied by 1.82% and that equals the percentage loss of hearing in the ear. Example: If the hearing level in one ear at 1,000 Hz is 20 db, at 2,000 Hz it is 40 db and at 3,000 Hz it is 50 db, then you add together 20 + 40 + 50 for a total of 110. You divide that number by 3 for an average hearing loss of 36.67. You subtract 30 and the net loss is 6.67 db. You multiply that number by 1.82% and the actual hearing loss which is compensable is 12.13% loss of use of an ear. Hearing loss in the ear is compensable at the permanent partial disability rate. Hearing loss is awarded based on actual loss irrespective of whether petitioner’s hearing can be improved with a hearing aid.
Three sections of the Act provide for penalties under the Act.
Section 19(l) provides for penalties for a delay in payment of compensation including both medical and indemnity benefits. It provides that if the employee has made a written demand for the payment of benefits for either medical or indemnity the employer has 14 days after receipt of the demand to respond in writing as to the reason for the delay. In the case of a demand for payment of medical benefits, the time for the employer to respond doesn’t commence until the expiration of the allotted 30 days specified in Section 8.2 (d). (That section of the Act grants an employer 30 days to pay a medical bill after it has received all required documentation necessary in order to obligate the employer to pay the bill.)
In the event the employer doesn’t timely pay (within 14 days) benefits which are due, the Commission can award a penalty of $30.00 per day for each day of delay up to a maximum of $10,000.00. A delay in payment of 14 days or more creates a rebuttable presumption of unreasonable delay.
The other two penalties sections are Section 19(k) and 16. These Sections are applied in tandem. Section 19(k) provides that where there has been an unreasonable or vexatious delay in payment or an intentional underpayment of compensation or if proceedings have been instituted or carried on by the one liable to pay compensation which do not present a reasonable controversy but are mainly for frivolous reasons or for delay, then the Commission can award additional compensation equal to 50% of the amount unpaid.
If the Commission awards benefits under Section 19(k) for 50% of the award, in addition the Commission can award attorney’s fees under Section 16 which are in the amount of 20%. A Section 16 attorney fee penalty cannot be awarded unless a Section 19(k) penalty is awarded as well.
Section 19(k) specifically states that it relates only to “compensation.” However, the Supreme Court in the McMahan v. Industrial Commission 183 Ill.2d 499 (1998) case determined that the term “compensation” as used in Section 19(k) applies to both the nonpayment of indemnity and medical bills.
The interest provisions of the Illinois Workers Compensation Act are contained in Section 19(n). It provides that if an employer appeals a decision of the arbitrator to the Commission the employer must pay interest on all accrued compensation due the employee through the date prior to the date of payment. However, the rate of interest is extremely low since it is tied to the six month U.S. government interest rate. Routinely the interest rate for the last several years has been less than ½%.
If an employee appeals from the arbitrator to the Commission and the result of the appeal is no change or a decrease in the award then no interest is due.
An employer can tender payment at any time to avoid the imposition of interest.
If an appeal is taken from the Commission to the Circuit Court or Appellate Court levels then the Interest Act rules apply. Interest Act interest is awarded at 9%. That interest amount is owed irrespective of whether either party appeals.
Attorney’s fees are limited by the provisions of Section 16 A of the Act. Attorney’s fees are capped at 20% of any award or settlement.
In cases of death or permanent total disability, attorney’s fees are limited to 20% of the benefits awarded up to a maximum of 364 weeks of compensation.
No fees can be awarded for undisputed and paid medical bills or temporary total disability. In cases of undisputed death benefits, statutory permanent disability, amputations, loss of a testicle and enucleation of an eye, attorney’s fees are capped at $100.00.
If an employer makes a written offer prior to attorney representation, an attorney can only earn a fee on the amount of the settlement or award obtained in excess of the prior written offer. The percentage of the fee that the attorney can take on the excess award or settlement is unlimited except that the total fee that the attorney takes on the case cannot exceed 20% of the total settlement or award. The amount of the fee must be set forth in the attorney fee agreement filed by the attorney at the time of the filing of the Application. Any and all fee disputes are within the discretion of the Commission.
Death benefits are set forth in Section 7 of the Workers Compensation Act. For accident dates prior to September 1, 2011, the death benefit was capped at $250,000.00 or 20 years of benefits, whichever was greater. For accident dates after September 1, 2011, the death benefit maximum is $500,000.00 or 25 years of benefits, whichever is greater.
The standard death benefit is 66 2/3% of the average weekly wage subject to minimums and maximums. The minimum rate is 50% of the state Average Weekly Wage. The Maximum rate is the TTD maximum. See chart at end of this summary.
In every death case burial expenses are awarded at $8,000.00 to whoever incurred the cost of the burial.
If the employee leaves a widow or widower, the widow or widower is entitled to the death benefit weekly for life up to a maximum of 25 years.
In the event a widow or widower gets remarried the benefits are terminated and a lump sum of two more years of benefits is paid.
However, if at the time of the remarriage by the widow/widower there are surviving children who at the time of the remarriage would be entitled to compensation benefits then the benefits continue irrespective of the remarriage.
If the employee leaves a surviving child or children then the weekly death benefit is paid to the child or children up until the age of 18. However, if a child is enrolled as a full-time student in any accredited educational institution the payments continue until the child has attained the age of 25.
The term child includes a child who is left surviving at the time of the death including a posthumous child, a child legally adopted, a child whom the deceased employee was legally obligated to support or a child to whom the deceased employee stood in local parentis.
If a child is physically or mentally incapacitated such that he is incapable of engaging in regular and substantial gainful employment, benefits continue for the duration of such incapacity regardless of age (the 25 year maximum would still apply however).
No matter the age of the children at the time of the death, benefits continue for a minimum of 6 years.
If an employee leaves a parent who is totally dependent on the employee at the time of the death, then the parent is entitled to lifetime benefits.
If the parent is not totally dependent on the employee, but only partially dependent, then the parent is entitled to benefits at a rate equal to the percentage of partial dependency for life up to a maximum of eight years. This same rule applies to a partially dependent child who is not entitled to benefits under Section 7(a) of the Act. This section of the Act applies no matter what percentage of dependency the parent or child has on the employee.
If an employee leaves any grandparents, grandchildren or collateral heirs who are dependent on the employee greater than 50% of total dependency, then b
Death benefits are awarded at 66 2/3% of the employee’s average weekly wage subject to minimums and maximums. The minimum death benefit rate is extremely high. The minimum death benefit rate can exceed the average weekly wage. The minimum death benefit is set at 50% of the State’s average weekly wage. The maximum death benefit is set at the TTD maximum which is 133 1/3% of the State’s average weekly wage. See the chart at the end of this article.
The amount of the death benefit is set as of the date of the accident if it results in the immediate death of the claimant. However, if a death occurs at a point in time subsequent to the accident the minimums and maximums which apply are based on the date of the death and not the date of the accident.
Death benefits are capped at a maximum of 25 years.
A Rate Adjustment Fund is established by the Act. Any beneficiary entitled to death benefits can apply to the Rate Adjustment Fund for additional benefits. Adjusted benefits are awarded in the event there has been a proportionate increase in the State’s average weekly wage. Employers pay into this fund. However, the application for benefits is solely against the fund for increases and not the employer.
The medical benefits in the Illinois Workers Compensation Act are contained in Section 8 (a), 8.1 (b) and 8.2 to Section 8.7. The Illinois Workers’ Compensation generally provides that an employee has the free choice of medical provider. It generally provides that an employer must pay all reasonable and necessary medical expenses associated with a work injury.
Over the last several years (2006 to 2011) the statute has been amended to place some additional limitations on medical in order to lower medical costs for the benefit of employers.
As to free choice of medical, the Act provides that an employee is entitled to free choice of medical with limitation that his free choice of medical is limited to two different providers and any referrals from those two different providers. First aid and emergency room treatment does not constitute a choice of provider. If an employer directs a claimant to a medical provider, that physician does not constitute an employee’s choice of medical provider.
In 2006, for the first time, the Illinois Workers Compensation Act added a Medical Fee Schedule which is set forth in Section 8.2. The goal of the Fee Schedule was to reduce employer costs. However, the Medical Fee Schedule was poorly drafted and found determined to be extremely generous. In 2011, the Medical Fee Schedule was modified. However, instead of revamping the statute, the legislature just dropped the Schedule reimbursement formula across the board by 30%. The Medical Fee Schedule contains automatic escalators which increase the reimbursement rate annually based on inflationary adjustments.
When paying medical bills an employer is obligated to pay a negotiated rate or the actual charges or the amounts set forth in the Fee Schedule.
The 2011 statutory amendments also included a provision which allowed employers to set up a Preferred Provider Program. In the event that an employer sets up a preferred provider program then an employee must choose a doctor from the preferred provider program. This section of the Act is intended to significantly limit the employee’s free choice of medical. The preferred provider program does have an opt out provision. It allows a claimant to opt of the preferred provider program and still have one free choice of physician.
Although this section of the Act was added in 2011, it took the Department of Insurance almost two years to issue regulations. As of 2014, few employers have actually established preferred provider programs. Issues involving this section of the Act have not yet been litigated.
Balance billing of employees is prohibited since the establishment of the Medical Fee Schedule in 2006.
Utilization Review - Section 8.7 allows employers to use utilization review in defending claims. However, the utilization review provisions of the Act which were added in 2006 and amended in 2011 are not at all binding on the Commission. If an employer uses utilization review to deny medical treatment, they cannot be assessed penalties for refusing to authorize treatment. However, the Commission is not in any way bound by the utilization review findings.
The Act simply provides that “an admissible utilization review shall be considered by the Commission along with all other evidence and in the same manner as all other evidence, and must be addressed with all other evidence in the determination of the reasonableness and necessity of the medical bills or treatment. Nothing in this section shall be construed to diminish the rights of employees to reasonable and necessary medical treatment or employee choice of health provider under Section 8(a) or the rights of employers to medical examinations under Section 12.”
There have been very few decisions from the Commission which deny medical treatment to a claimant based on utilization review. If an employer chooses to dispute and deny medical treatment as unreasonable and unnecessary, the employer should couple a utilization review report with an independent medical evaluation report to have a better chance of success.
The Act does not really address the issue of a refusal to seek medical care. Based on case law, an employer cannot require an employee to undergo surgery to fix a medical condition. An employee is entitled to refuse a surgical option. Rockford Clutch Division, Borg Warner Corp. v. Industrial Commission, 34 Ill.2d 240 (1966). However, the Commission has considered an employee’s failure to cooperate with reasonable and necessary conservative medical treatment to determine whether or not an employee is entitled to continuing benefits. Walker v. Industrial Commission, 345 Ill.App.3d 1084 (2004).
Although this section is rarely used, Section 19(d) of the Act prohibits an employee from engaging in insanitary or injurious practices which tend to either imperil or retard his recovery. Further, that section of the Act also states that if the employee shall refuse to submit to such medical, surgical, or hospital treatment as is reasonably essential to promote his recovery, the Commission may, in its discretion, reduce or suspend the compensation of any such injured employee. This section of the Act has never been used to deny compensation to an employee who refuses to undergo a surgical procedure to improve his condition.
Section 5 of the Illinois Workers Compensation Act grants employers broad subrogation rights with respect to any civil lawsuit filed by an employee for recovery of damages arising out of the work injury. An employer is entitled to lien reimbursement against any settlement or award that a claimant may receive from a liable third party.
An employer is entitled to recover 100% of its workers’ compensation lien. However, if the settlement or award is obtained by an attorney on behalf of the claimant then the employer must reimburse the attorney at a rate of 25% of its recovery. The employer’s lien is further reduced by the proportionate share of expenses comparing the lien recovery to the overall settlement.
If a lawsuit is filed by a claimant against a third party the employer must be notified of the filing. The employer is entitled to file a petition to intervene in any lawsuit to make sure its lien rights are protected. No release or settlement and no satisfaction of judgement is valid without the written consent of the employer. However, such consent is not required if the employer has been fully indemnified and protected by court order.
In the event the claimant does not file a lawsuit against a liable third party the employer may in its own name or in the name of the employee commence a proceeding against the one liable for the accident within the last three months before such action would be barred by the Statute of Limitations. In the event the employer’s subrogation action results in judgment or settlement in excess of the employer’s lien, then any excess amount is owed to the injured employee.
Per Illinois case law an employer cannot subrogate against a claim for uninsured or underinsured motorist coverage. This is true even the claim is made against the employer’s motor vehicle carrier.
Out of any settlement or judgment the employer is entitled to 100% lien recovery. However, the employer must pay to the claimant’s attorney at 25% fee plus a proportionate share of the expenses. The proportionate share of the expenses is based on the percentage achieved by comparing the employer’s net recovery versus the total settlement amount.
An employer is entitled to subrogate as against any liable third party in a negligence action involving a motor vehicle accident. An employer is not allowed to subrogate against an uninsured or underinsured motor vehicle carrier. This rule of law applies even if the insurer is the employer’s own insurer.
Section 8(j)(1) grants employer’s credit for any benefits paid pursuant to a full or partially funded employer group health program. An employer is not entitled to credit for any payments made by a group health plan not paid in part or in full by the employer including any payments made pursuant to Medicare or Medicaid.
In the event the employer is given credit for payments made pursuant to an employer funded group health plan, the employer is required to hold the claimant harmless as against any claim for reimbursement made against the employee.
The credit provisions of the Act for health insurance apply only to a group health plan which only pays benefits for non occupational claims.
An employer is entitled to a credit as against its obligation to pay TTD if the employer paid full or partial salary, group disability, bonuses or any other payments intended to compensate the individual for time lost following a work injury. However, the employer is only entitled to credit for these payments to the extent of the obligation to pay benefits. For example, if following a work injury a claimant is entitled to TTD benefits at $400.00 a week but the employer paid wages at a rate of $600.00 per week, the employer is entitled to credit only to the extent of the $400.00 per week award. Any excess payments cannot be used as a credit against any other obligation the employer may have under the Act. An employer cannot claim an overpayment credit for wages paid during a period of TTD as against a PPD award.
If the employer pays wages or group disability benefits the employer is entitled to a credit for the benefits paid only to the extent of the net benefit payable to the claimant and not the gross benefit.
Section 8(e)17 grants employers credit for PPD for prior settlement or awards as against current claims for loss of use of a member. The credit granted is for the prior % of disability awarded. If a claimant is entitled to 30% loss of use of a foot currently and has a prior settlement of 20% loss of use of the foot, his current recovery is 10% loss of use of the foot no matter what the prior rate was compare to the current rate.
The Act does not provide for credit for prior man as a whole awards under Section 8(d)(2). The provisions of Section 8(e)17 are held to apply only to awards under Section 8(e) and not Section 8(d)(2). This is an unfortunate and unfair statutory loophole that is a true disservice to employers and carriers.
The Illinois Workers Compensation Act does not contain any statutory rules for attorneys who practice workers’ compensation law. Attorneys in Illinois are required to graduate from law school and pass the Illinois State Bar. They are required to be certified by and held in good standing by the Attorney Registration and Disciplinary Commission.
Any attorney who files an application with the Illinois Workers’ Compensation Commission must also file an attorney representation agreement setting forth his agreement with the claimant as to limitation of fees.
The Illinois Workers' Compensation Act does not have any rules or regulations concerning claims professionals. There is no obligation that an Illinois Workers’ Compensation adjuster has to be certified or trained.
The Illinois Workers' Compensation Act is administered by the Illinois Workers’ Compensation Commission. The Commission consists of 10 members, three of whom are representatives for employers, three of whom are representatives for employees and four of whom are public representatives. One of the public members is designated as chairman. The other nine members are broken into three panels of three Commissioners each and they act as appeals judges from decisions of the arbitrators.
The Illinois Workers’ Compensation Commission is a reactive and not a proactive body. All employers must file notices of any accidents with the Commission. However, the Commission does not become involved in the administration of claims unless an application for benefits is filed with the Commission. The Commission does not have any staff who provide any assistance or information to injured employees.
There are two types of workers’ compensation judges, arbitrators and commissioners. For many years arbitrators were appointed by the governor and served essentially for life.
However, as a result of statutory changes in June 2011 all the terms of the arbitrators ended effective July 1, 2011. Currently, all arbitrators serve three year terms. The three year terms are staggered. Arbitrators are appointed by the governor but now their appointment requires the consent of the Illinois State Senate. All new arbitrators appointed after July 1, 2011, are required to be practicing lawyers. Most of the arbitrators are now practicing lawyers, although a few arbitrators who had been appointed prior to July 1, 2011, are not lawyers.
Commissioners are also appointed by the governor and as always require Senate approval. In order to qualify as a commissioner an individual must either be a practicing lawyer or has served as an arbitrator for at least three years or have at least four years of professional labor relations experience.
A claim begins before the Illinois Workers’ Compensation Commission with the filing of an application for adjustment of claim. The application can be filed pro se or through an attorney. Very few pro se applications are filed. Nearly are all applications are filed by attorneys. The filing of an application is free.
Once a case is filed the case is assigned to an arbitrator. There are approximately 30 arbitrators. Approximately half of them work at the main Commission headquarters in Chicago and the other half handle cases at various venues throughout the State of Illinois. After a case is filed an assigned to an arbitrator the case is set on a status call date before that arbitrator. If neither party requests a trial date on the status call date the case is continued in three month increments for up to three years. Once a case is more than three years old it is no longer routinely continued but instead it must be set for trial or dismissed.
If the parties cannot reach a settlement with respect to the claim a trial is held before an arbitrator. An employee can motion a case for trial on the status call date. An employer has a limited right to request a trial date after a claimant has been back to work and at MMI for at least 6 months.
The Illinois rules of evidence apply to any trials. The employee has the burden of proof to prove his claim by the preponderance of the evidence at trial and the burden of going forward. Both parties are allowed to present evidence before the arbitrator including testimony and documents. Medical records are admissible over any hearsay objections except to the extent that the medical records or reports were prepared for the purpose of litigation.
After completion of a hearing before the arbitrator, parties are required to submit proposed decisions. The arbitrator subsequently issues an award – including findings of fact and conclusions of law. After receipt of the award either party has 30 days within which to appeal to the Illinois Workers’ Compensation Commission.
Arbitrators are granted broad investigatory powers pursuant to Section 19(b) of the Workers’ Compensation Act. The statute provides “The arbitrator shall make such necessary inquiries in an investigation as he or they shall deem necessary and may exam and inspect all books, papers, records, places, or premises relating to the questions in dispute and hear such proper evidence as the parties may submit”. Although granted broad powers arbitrators rarely perform their own inquiries but instead rely on the evidence presented by the parties.
The Workers' Compensation Act requires that after hearing the evidence the arbitrator must issue a written decision containing findings of fact and conclusions of law.
Any decision issued by an arbitrator may be appealed to the Workers’ Compensation Commission. The time deadline for filing an appeal is 30 days from the date of receipt of the arbitrator’s decision.
Appeals to the Commission are heard by a three member panel of the Commission consisting of an employer representative, an employee representative and a public representative. There are three panels of three Commissioners each who hear workers’ compensation appeals.
Upon the filing of a petition for review with the Commission a transcript of the proceedings before the arbitrator is prepared. A certified and agreed transcript must be filed with the Commission. After the filing of the certified record the appealing party is granted 30 days within which to file a brief with the Commission. The non appealing party is granted 15 days thereafter to file a brief with the Commission.
Thereafter, the Commission schedules oral arguments. Oral arguments are presented before the panel of three commissioners.
There is an automatic right of appeal from a decision of the arbitrator to the Illinois Workers’ Compensation Commission. The Commission’s scope of review is de novo. The Commission is not obligated to give any deference to the decision of the arbitrator. The Commission can accept or reject the arbitrator’s decision at its discretion.
Appeals to the Commission are based solely on the evidence presented before the arbitrator. No additional evidence is allowed on review. The Illinois Workers’ Compensation Commission serves purely as an appellate body for arbitrator decisions.
The Illinois Workers’ Compensation Commission by statute is granted authority to resolve disputes involving the Illinois Workers’ Compensation Act.
Either party can appeal a decision from the Illinois Workers’ Compensation Commission to the Circuit Court. The time deadline for filing an appeal from the Commission to the Circuit Court is 20 days from receipt of the Commission’s decision. The right of appeal is limited. Review in the Circuit Court is not de novo. The Circuit Court gives deference to the Commission’s decision and only has de novo review of legal questions. Factual questions are held to be within the province of the Illinois Workers’ Compensation Commission and are overturned only if a party proves that the Commission’s decision is contrary to the manifest weight of the evidence.
Either party may appeal a decision from the Circuit Court to the Workers’ Compensation Division of the Appellate Court. This panel consists of 5 appellate judges, one from each of the 5 Appellate Districts in the state of Illinois. Participation on the panel is voluntary.
Any appeal to the Appellate Court must be filed within 30 days from the date the Circuit Court decision is issued. The standard of review in the Appellate Court is the same as the standard of review in the Circuit Court. A decision from the Workers’ Compensation Division of the Appellate Court is generally final. There is no automatic right to review an Appellate Court decision in the Supreme Court.
There is no automatic right to appeal an Appellate Court decision to the Supreme Court. There is a very limited right of review. A petition for leave to appeal can be filed in the Supreme Court only if two of the Appellate Justices certifies the case as having an substantial question that warrants consideration by the Supreme Court. However, even with the certification by the Appellate judges, a party may only petition the Supreme Court to hear the appeal. A case is only heard by the Supreme Court if the Supreme Court agrees to hear the case.
The standard of review in the Supreme Court is the same as in the Circuit Court and Appellate Court. Factual determinations of the Commission are only subject to change if they are contrary to the manifest weight of the evidence. Legal issues are reviewable de novo.
Illinois does not have a mandatory mediation program.
Illinois does not have a voluntary mediation program. Workers’ compensation cases are rarely mediated unless as part of a mediation involving a related third party civil case.
Informal settlement conferences are routinely held before the arbitrators depending on the agreement of the parties and the agreement of the arbitrator. As a general rule arbitrators are willing to hold informal settlement conferences to assist parties in settlement negotiations.
The Illinois Workers’ Compensation statute provides that no settlement or agreement between the parties is valid unless it is approved by the Illinois Workers’ Compensation Commission. Any settlement which purports to close out a claimant’s rights without Commission approval is invalid and extends the statute of limitations. See Section 23
Illinois law does favor settlements and parties can fully and finally settle all issues in a case. All settlement agreements generally close out all future rights for indemnity and medical. Settlement contracts can be approved by either an arbitrator or a commissioner.
All employers are required to purchase workers’ compensation insurance pursuant to Section 4 (a). Alternatively, an employer may apply to be a qualified self-insured. However, many fewer employers seek self-insurance with the vast majority of employers purchasing workers’ compensation insurance.
Illinois has had problems with uninsured employers and the statute was changed recently to impose both significant criminal and civil penalties for employers who fail to purchase insurance. An employer who intentionally fails to purchase insurance is guilty of a class IV felony. An employer who negligently fails to purchase insurance is guilty of a class A misdemeanor. However, the criminal penalties do not apply when there exists a good faith dispute as to the existence of an employment relationship.
Civil penalties are imposed also. Civil fines for the knowing failure to have insurance are $500/day with a minimum penalty of $10,000.00. The inadvertent failure to have insurance can generate a penalty of $500.00 to $2,500.00.
Civil penalties for lack of coverage include loss of exclusive remedy protections.
The statute provides “employers who are subject to and who knowingly fail to comply with this section (purchasing insurance) shall not be entitled to the benefits of this Act during the period of noncompliance, but shall be liable in an action under any other applicable law of this State. In the action, such employer shall not avail himself or herself of the defenses of assumption of risk or negligence or that the injury was due to a co-employee. In the action, proof of the injury shall constitute prima facie evidence of negligence on the part of such employer and the burden shall be on such employer to show freedom of negligence resulting in the injury.”
Employees have the right to pursue a WC claim or a civil claim at their discretion.
There has been created the Injured Workers’ Benefit Fund. This fund pays for claims against uninsured employers. The fund is defended by the Attorney General’s office.
In the event a claim is filed against an uninsured employer the claimant may add the Injured Workers’ Benefit Fund as an additional party. After an award is entered if the uninsured employer fails to pay the award, the award is then paid by the Injured Workers’ Benefit Fund. The Injured Workers’ Benefit Fund has the right of total subrogation against the uninsured employer.
The Injured Workers’ Benefit Fund is funded by civil penalties leveled against other uninsured employers.
Temporary Total Disability (TTD) and Death Benefit Rates TTD and Death Rate = AWW x 66 2/3 %
Minimum TTD Rates* Before 2/1/06 2/1/06–6 30/07 7/1/07–6/30/08 7/1/08–6/30/09 7/1/09–7/15/10 7/15/10–7/14/14 Single 100.90 173.32 200.00 206.67 213.33 220.00 Married, 0 children
Single with 1 child
105.50 199.32 230.00 237.67 245.33 253.00 M w/ 1 or S w/ 2 108.30 225.32 260.00 268.67 277.33 286.00 M w/ 2 or S w/ 3 113.40 251.32 290.00 299.67 309.33 319.00 M w/ 3 or S w/ 4 117.40 260.00 (max) 300.00 (max) 310.00 (max) 320.00 (max) 330.00 M w/ 4 or S w/ 5 124.30 260.00 300.00 310.00 320.00 330.00
Temporary Total Disability (TTD) and Death Benefit Rates
TTD and Death Rate = AWW x 66 2/3 %
* The TTD rate shall not exceed an employee's average weekly wage. The TTD compensation rate is to be 100% of employee’s AWW or the above minimum, whichever is less.
Maximums for TTD, Death and Member Amputations ---- Minimums for Death, PTD and Member Amputations The TTD, death benefit and member amputation maximum is set at 133 1/3 % of the state's average weekly wage. The death benefit, permanent total disability (PTD) and member amputation rate minimum is set at 50% of the state average weekly wage. The maximum and the minimum rates change two times a year on January 15 and July 15. The member amputation minimum applies to accident dates after 2/1/06.
Wage Differential Claims The Max Wage Differential Rate for dates of accident after 2/1/06 is the State AWW in effect on the date of accident. Wage Differential Benefits for dates of accident on and after 9/1/11 end at age 67 or last a maximum of five years from the date of a final decision.
|Time Period||Maximum TTD, Death |
& Amputation Rate
|Minimum Death, PTD |
& Amputation Rate
|1/15/04 to 7/14/04||1019.73||382.40||764.80|
|7/15/04 to 1/14/05||1034.56||387.96||775.92|
|1/15/05 to 7/14/05||1051.99||394.50||788.99|
|7/15/05 to 1/14/06||1078.31||404.37||808.73|
|1/15/06 to 7/14/06||1096.27||411.10||822.20|
|7/15/06 to 1/14/07||1120.87||420.33||840.65|
|1/15/07 to 7/14/07||1148.51||430.69||861.38|
|7/15/07 to 1/14/08||1164.37||436.64||873.28|
|1/15/08 to 7/14/08||1178.49||441.93||883.86|
|7/15/08 to 1/14/09||1216.75||456.28||912.56|
|1/15/09 to 7/14/09||1231.41||461.78||923.56|
|7/15/09 to 1/14/10||1243.00||466.13||932.25|
|1/15/10 to 7/14/10||1243.00||466.13||922.45|
|7/15/10 to 1/14/11||1243.00||466.13||925.08|
|1/10/11 to 7/14/11||1243.00||466.13||930.39|
|7/15/11 to 1/14/12||1261.41||473.03||946.06|
|1/15/12 to 7/14/12||1288.96||483.36||966.72|
|7/15/12 to 1/14/13||1295.47||485.80||971.60|
|1/15/13 to 7/14/13||1320.03||495.01||990.02|
|7/15/13 to 1/14/14||1331.20||499.20||998.40|
|1/15/14 to 7/14/14||1336.91||501.34||1002.68|
Permanent Partial Disability
PPD rate = AWW x 60% - Applies to all PPD claims including amputations
|Minimum PPD Rates*||Before 2/1/06||2/1/06–6 30/07||7/1/07 – 6/30/08||7/1/08 – 6/30/09||7/1/09 – 7/15/10||7/15/10– 7/14/14|
|Married, 0 children |
Single with 1 child
|M w/ 1 or S w/ 2||86.10||225.32||260.00||268.67||277.33||286.00|
|M w/ 2 or S w/ 3||88.90||251.32||290.00||299.67||309.33||319.00|
|M w/ 3 or S w/ 4||91.80||260.00 (max)||300.00 (max)||310.00 (max)||320.00 (max)||330.00|
|M w/ 4 or S w/ 5||96.90||260.00||300.00||310.00||320.00||330.00|
* The PPD rate shall not exceed an employee's average weekly wage. The compensation rate is to be 100% of employee's average weekly wage or the above minimum, whichever is less.
Maximum PPD rates* *
The PPD maximum increases annually effective July 1 in the same proportionate increase as the state average weekly wage. Although by statute, the PPD maximum increases on 7/1, the new rate does not go into effect until published by the Commission in the following December.
|Time Period||Rate||Time Period||Rate|
|7/1/91 - 6/30/92||353.88||7/1/02 - 6/30/03||542.17|
|7/1/92 - 6/30/93||371.36||7/1/03 - 6/30/04||550.47|
|7/1/93 - 6/30/94||384.73||7/1/04 - 6/30/05||567.87|
|7/1/94 - 6/30/95||396.89||7/1/05 - 6/30/06||591.77|
|7/1/95 - 6/30/96||410.43||7/1/06 - 6/30/07||619.97|
|7/1/96 - 6/30/97||421.59||7/1/07 - 6/30/08||636.15|
|7/1/97 - 6/30/98||439.89||7/1/08 - 6/30/10||664.72|
|7/1/98 - 6/30/99||465.67||7/1/10 - 6/30/11||669.64|
|7/1/99 - 6/30/00||485.65||7/1/11 – 6/30/12||695.78|
|7/1/00 - 6/30/01||516.15||7/1/12 – 6/30/13||712.55|
|7/1/01 - 6/30/02||534.16||7/1/13 – 6/30/14||721.66|
|Schedule of Losses||Before 7/20/05 or |
or 2/1/06 and after
|§8(d)(2) - Man as a whole||500 weeks||500|
Fingers and Toes - Loss of all or part of distal phalanx (bony loss) equals 50% loss. Loss beyond distal phalanx equals 100% loss. Amputation of or loss of use of 4 fingers equals 100% loss of hand.